Tax and SARS knowledge base
Which SARS return applies to income after a taxpayer dies?
Which SARS return applies to income after a taxpayer dies?
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Direct answer
SARS distinguishes two income-tax periods when a taxpayer dies: the period up to the date of death and the period after death for the deceased estate. Its current guide calls these the pre-date-of-death assessment and the post-date-of-death assessment. The post-date-of-death assessment covers income and deductions that apply to the deceased estate after death. SARS states that the ITR12 is the current return used for deceased or insolvent estates, with estate-specific rules and fields.
The important task is to allocate the facts correctly. Do not put all income received by an executor into the estate return, and do not leave estate income on the deceased person's final return simply because the asset originally belonged to that person.
What this means in practice
The final personal tax position does not necessarily close the estate's tax affairs. Income and deductions applicable up to the date of death belong in the pre-date-of-death assessment. SARS gives rental and interest income earned by the estate after death as examples of matters for the post-date-of-death assessment.
SARS's guide explains that the return for a deceased estate is the individual income-tax return, ITR12. That does not make an estate identical to the deceased person. The guide notes that some sections of the ITR12 are not applicable to deceased or insolvent estates. The executor should therefore use the estate guidance, not simply duplicate an earlier individual return.
Good records are essential. Build a timeline beginning with the date of death. For each receipt, expense, asset disposal and tax certificate, record the relevant period, legal source, amount, document reference and proposed taxpayer. This is more reliable than attempting the split later from a bank statement alone.
Step-by-step
- Confirm the date of death and retain the death notice, death certificate and executor appointment documentation. Identify all income sources, assets and liabilities that may create tax records.
- Prepare a pre-death schedule. Include income and deductions that apply to the deceased person up to the date of death. Preserve the certificates, statements and calculations.
- Prepare a separate post-death estate schedule. Record income and deductions that accrued to the estate after death. SARS gives estate rental and interest income as examples, but the actual allocation depends on the facts.
- Confirm that the estate has the required SARS registration where post-death taxable income exists. SARS's guide says a second registration is required for deaths on or after 1 March 2016 if taxable income accrued to the deceased estate.
- Open the appropriate ITR12 through the authorised channel and use the current deceased-estate guide when answering its estate-specific questions. Do not force an answer into a section that the guide says does not apply.
- Reconcile the return to the split schedules. Check that the same income or expense has not been included both before and after death. Keep explanatory notes for border-line items.
- Submit only after reviewing the work with the executor and saving the documents. Retain records for the period stated in current SARS guidance and respond promptly to any verification request.
Documents and records to keep
- Death date evidence and executor authority.
- Separate pre-death and post-death income and expense schedules.
- Bank, rental, investment, payroll and tax-certificate records.
- ITR12 copies, calculations, submission confirmations and SARS correspondence.
- Evidence supporting the allocation of any asset sale or unusual receipt.
Important limits and exceptions
The date a payment is received is not always the same as the date on which income accrued. A payment after death might relate to income earned before death, while an estate may earn income from an asset retained after death. Keep the allocation support clear and obtain advice where the position is uncertain.
This guide does not calculate capital gains tax, Estate Duty, deductions or beneficiary tax consequences. Estates with property sales, business activities, foreign assets, retirement benefits or trusts often need a broader review. A correct ITR12 channel does not prove that every amount has the correct tax treatment.
When to get tailored advice
Get tailored advice if the estate has a business, rental properties, foreign income, significant investments, a capital gain or loss, insolvency, beneficiary disputes or uncertain accrual dates. Seek help promptly if SARS raises a verification, estimated assessment or audit.